Handling growing US oil supply

The AFPM has released a third party survey of US refiners, given the continuous debate over domestic refiners’ ability to handle the growing US oil supply. The survey found that US refiners have more than enough processing capacity for the increased influx of light sweet crude oil over the next few years. Respondents represent a majority of US refining Capacity.

AFPM President Charles T. Drevna said, “with the results of today’s survey, we know without a doubt that our refiners are ready and able to process the increasing US supply of light sweet crude. The domestic energy renaissance is boosting our economy and benefitting our national security, and our refining industry, the world’s largest and most advanced, which is fully capable of handling this production growth over the next few years.”

Findings and stats

In total 23 companies provided information on 69 refineries, representing 61% of US refining capacity last year. The survey found that the respondents are planning to run more than 730 000 bpd more very light crude oil in 2016 than last year, and with more favourable access and economics, they have the capability to run 1.5 million bpd more of the new crude oil in 2016 than what was run in 2014. This does not take into consideration however the plans and potential for 40% of the capacity not represented in the survey. EIA’s February forecast shows lower 48 crude production, which encompasses this light tight oil production, increasing 720 000 bpd, less than the respondents’ plans.

US production averaged 8.7 million bpd in 2014, a 73% increased over 2008 when production was approximately 5 million bpd. Much of the recent increase has come from geological structures called tight oil formations, and the crude is very light and sweet. However, over the past 30 years, many US refiners have added capacity for processing heavy sour crude. This apparent disparity has been the source of confusion over refiners’ capacity to process the increasing volume of new light crude.